CRISPR Therapeutics (CRSP -0.59%) is a star in the gene-editing therapy niche. The company made tremendous progress over the past few years, culminating in its first regulatory approval -- for Casgevy, a therapy for the rare blood diseases transfusion-dependent beta-thalassemia and sickle cell disease.
Though that was an important milestone for the biotech, CRISPR Therapeutics remains unprofitable, and it is unlikely to launch another product in the next couple of years. In light of all that, is it worth investing in CRISPR Therapeutics today?
Casgevy: The sky is the limit
Developing gene-editing therapies is difficult, but commercializing them is its own challenge. To administer Casgevy, physicians first need to collect the patient's cells, which are edited and reinserted into them via a stem cell transplant. These procedures must be performed in authorized treatment centers. CRISPR Therapeutics originally created Casgevy, but co-markets it with the much larger Vertex Pharmaceuticals.
Teaming up with Vertex turned out to be a great move. With the large-cap biotech taking the lead on commercializing it, Casgevy has been approved in the U.S., Great Britain, the European Union, Saudi Arabia, and Bahrain, with pending approvals likely in Canada and Switzerland.
Although CRISPR Therapeutics will only receive 40% of the profits associated with Casgevy because of its agreement with Vertex Pharmaceuticals, the deal was well worth it. There is no way a mid-cap biotech company would have been able to launch and commercialize a gene-editing therapy in that many markets that rapidly.
The target market for Casgevy isn't huge, at least for now. Vertex and CRISPR estimate that there are about 35,000 eligible patients in the U.S. and Europe. Vertex has also said it estimates there are about 23,000 eligible patients in Saudi Arabia and Bahrain.
International markets will be crucial for Casgevy as competing gene therapies have already been approved in the U.S. -- Zynteglo for beta-thalassemia, and Lyfgenia for sickle cell disease. Those are both marketed by Bluebird Bio, a small biotech company that exited the European market a few years ago. And while there are several more potential competing medicines in clinical trials, it's unlikely that many will earn approval in the Middle East.
In my view, Vertex and CRISPR Therapeutics are well-positioned to grab upwards of 20% of Casgevy's total addressable market. The therapy -- a one-time treatment that should provide patients with a functional cure -- costs $2.2 million per treatment in the U.S., so there is a multibillion-dollar opportunity here.
So far, the partners have activated more than 25 authorized treatment centers globally and have started treatment on several patients although they have not shared exact numbers. It will likely take at least another year before Casgevy's sales rate approaches something like its full potential. But investors should expect strong and consistent revenue growth for years for CRISPR Therapeutics once Casgevy hits its stride.
Betting on CRISPR's innovative abilities
Many beta-thalassemia and sickle cell patients aren't eligible for Casgevy as it is currently administered. CRISPR Therapeutics and Vertex Pharmaceuticals are working on targeting those people, whose numbers exceed 100,000 in the geographies where they do business. If investors get anything out of CRISPR Therapeutics' success with Casgevy, it is that its gene-editing platform has the potential to unlock therapies for illnesses that have previously been difficult or impossible to effectively treat.
For certain conditions, even where treatment options exist, gene editing could do a much better job of addressing them. One of CRISPR Therapeutics' recent presentations highlighted gene editing's potential ability to fix a genetic defect that is the most common cause of glaucoma. Since glaucoma is the second-leading cause of blindness worldwide, it's not hard to see what developing a successful therapy could mean for the company.
Though CRISPR Therapeutics' work in that indication is still in the early stages, the company has five non-Casgevy candidates in clinical trials, targeting type 1 diabetes and various forms of cancers and cardiovascular diseases. The biotech has many more programs in pre-clinical development. Even though it won't bring any new treatments to market soon, CRISPR Therapeutics stock looks attractive for long-term investors, given the company's strong pipeline, innovative abilities, and the cash that will eventually flow from Casgevy.
